Why commodities deserve a place in all portfolios

Commodity funds have attracted a lot of interest lately, on the back of some very spectacular gains, writes Castlestone's Brad Yim.

On the surface it may seem as if the commodity sector has been enjoying a liquidity-led bull run and should now be viewed as expensive, with all the positive news already factored into the price. We disagree – nobody is denying the market rally during 2009 was liquidity driven, but it was a liquidity rally following on from a total collapse in 2008 and should be seen as a return to sanity. Fundamentals should begin to take hold as we move further into 2010. If we discount the hype, the reality is commodities have trailed virtually all major asset classes in the liquidity fuelled rally of...